Interesting take on the role of Social Venture Capital

7th Apr 2009
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Last night in my Social Venture Capital class, my professor said something that I found interesting. With regard to requirement of many social VCs for their portfolio companies to make market comparable returns, he explained it as the following:

We want to develop a track record for these ventures so that they can show traditional investors later on that they are robust enough for their capital to scale up even further.

I find this rationale interesting as I have traditionally believed that Social VCs should sacrifice returns in order to widen the range of companies they can invest in for the social impact. However, when focusing on long-term scalability of such ventures, this alternative approach does seem intriguing.

What are your thoughts on this?

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